Firm focused on brownfield development in the north of England, upping landbank to 2,400 plots
Urban regeneration specialist MJ Gleeson has reported a rise in pre-tax profit in the year to June 2011 despite an 11% drop in revenue.
Pre-tax profit for the year stands at £1.5m, up from £400,000 the year before, with operating profit at £900,000 compared with a £300,000 loss.
Revenue at division Gleeson Regeneration and Homes rose by 56% to £35.4m, but land trading arm Gleeson Strategic Land saw it fall from £10.5m to £5.8m. Revenue for the group, which sold parts of its business over the year, dropped from £46.5m to £41.4m on continuing operations.
Sharp cuts to staffing saw the average number of employees during the year fall from 285 in 2010 to just 100 in 2011, and brought central overheads down by 26% to £1.4m.
Gleeson Commercial Property Developments generated no income after completing the sales of its businesses, including the disposal of Powerminster Gleeson Services to Morgan Sindall for £6.6m in June last year.
Over the year, the group took advantage of reduced land prices in northern England to augment its landbank, which now totals over 2,400 plots, including conditionally purchased sites.
Chairman Dermot Gleeson said: “The short-term outlook for housing demand remains difficult to predict. However, the board continues to be confident that the group’s strategic focus on low cost brownfield development in the north of England and on the promotion and sale of high value greenfield sites in the South will ensure a strong and sustainable improvement in performance.”
Gleeson Strategic Land completed two substantial land sales and four smaller plot sales in the year to June 2011, making an operating profit of £2.7m.
The northern focus continued at Gleeson Regeneration and Homes, where the number of units sold increased by 64%, but the average selling price dropped from £131,000 in 2010 to £124,000 - the result of lower house prices.
The group has now exchanged contracts for the sale of three PFI investments, and expects to receive the proceeds before the close of 2011.